(a) Mandatory exclusion The Secretary shall exclude the following individuals and entities from participation in any Federal health care program (as defined in section
1320a–7b (f) of this title):
(1) Conviction of program-related crimes
Any individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under subchapter XVIII of this chapter or under any State health care program.
(2) Conviction relating to patient abuse
Any individual or entity that has been convicted, under Federal or State law, of a criminal offense relating to neglect or abuse of patients in connection with the delivery of a health care item or service.
(3) Felony conviction relating to health care fraud
Any individual or entity that has been convicted for an offense which occurred after August 21, 1996, under Federal or State law, in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program (other than those specifically described in paragraph (1)) operated by or financed in whole or in part by any Federal, State, or local government agency, of a criminal offense consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.
(4) Felony conviction relating to controlled substance
Any individual or entity that has been convicted for an offense which occurred after August 21, 1996, under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.
(b) Permissive exclusion The Secretary may exclude the following individuals and entities from participation in any Federal health care program (as defined in section
1320a–7b (f) of this title):
(1) Conviction relating to fraud Any individual or entity that has been convicted for an offense which occurred after August 21, 1996, under Federal or State law
(A) of a criminal offense consisting of a misdemeanor relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct
(i) in connection with the delivery of a health care item or service, or
(ii) with respect to any act or omission in a health care program (other than those specifically described in subsection (a)(1) of this section) operated by or financed in whole or in part by any Federal, State, or local government agency; or
(B) of a criminal offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct with respect to any act or omission in a program (other than a health care program) operated by or financed in whole or in part by any Federal, State, or local government agency.
(2) Conviction relating to obstruction of an investigation
Any individual or entity that has been convicted, under Federal or State law, in connection with the interference with or obstruction of any investigation into any criminal offense described in paragraph (1) or in subsection (a) of this section.
(3) Misdemeanor conviction relating to controlled substance
Any individual or entity that has been convicted, under Federal or State law, of a criminal offense consisting of a misdemeanor relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.
(4) License revocation or suspension Any individual or entity
(A) whose license to provide health care has been revoked or suspended by any State licensing authority, or who otherwise lost such a license or the right to apply for or renew such a license, for reasons bearing on the individuals or entitys professional competence, professional performance, or financial integrity, or
(B) who surrendered such a license while a formal disciplinary proceeding was pending before such an authority and the proceeding concerned the individuals or entitys professional competence, professional performance, or financial integrity.
(5) Exclusion or suspension under Federal or State health care program Any individual or entity which has been suspended or excluded from participation, or otherwise sanctioned, under
(A) any Federal program, including programs of the Department of Defense or the Department of Veterans Affairs, involving the provision of health care, or
(B) a State health care program,
for reasons bearing on the individuals or entitys professional competence, professional performance, or financial integrity.
(6) Claims for excessive charges or unnecessary services and failure of certain organizations to furnish medically necessary services Any individual or entity that the Secretary determines
(A) has submitted or caused to be submitted bills or requests for payment (where such bills or requests are based on charges or cost) under subchapter XVIII of this chapter or a State health care program containing charges (or, in applicable cases, requests for payment of costs) for items or services furnished substantially in excess of such individuals or entitys usual charges (or, in applicable cases, substantially in excess of such individuals or entitys costs) for such items or services, unless the Secretary finds there is good cause for such bills or requests containing such charges or costs;
(B) has furnished or caused to be furnished items or services to patients (whether or not eligible for benefits under subchapter XVIII of this chapter or under a State health care program) substantially in excess of the needs of such patients or of a quality which fails to meet professionally recognized standards of health care;
(C) is
(i) a health maintenance organization (as defined in section
1396b (m) of this title) providing items and services under a State plan approved under subchapter XIX of this chapter, or
(ii) an entity furnishing services under a waiver approved under section
1396n (b)(1) of this title,
and has failed substantially to provide medically necessary items and services that are required (under law or the contract with the State under subchapter XIX of this chapter) to be provided to individuals covered under that plan or waiver, if the failure has adversely affected (or has a substantial likelihood of adversely affecting) these individuals; or
(D) is an entity providing items and services as an eligible organization under a risk-sharing contract under section
1395mm of this title and has failed substantially to provide medically necessary items and services that are required (under law or such contract) to be provided to individuals covered under the risk-sharing contract, if the failure has adversely affected (or has a substantial likelihood of adversely affecting) these individuals.
(7) Fraud, kickbacks, and other prohibited activities Any individual or entity that the Secretary determines has committed an act which is described in section
1320a–7a,
1320a–7b, or
1320a–8 of this title.
(8) Entities controlled by a sanctioned individual Any entity with respect to which the Secretary determines that a person
(A)
(i) who has a direct or indirect ownership or control interest of 5 percent or more in the entity or with an ownership or control interest (as defined in section
1320a–3 (a)(3) of this title) in that entity,
(ii) who is an officer, director, agent, or managing employee (as defined in section
1320a–5 (b) of this title) of that entity; or
(iii) who was described in clause (i) but is no longer so described because of a transfer of ownership or control interest, in anticipation of (or following) a conviction, assessment, or exclusion described in subparagraph (B) against the person, to an immediate family member (as defined in subsection (j)(1) of this section) or a member of the household of the person (as defined in subsection (j)(2) of this section) who continues to maintain an interest described in such clause is a person
(B)
(i) who has been convicted of any offense described in subsection (a) of this section or in paragraph (1), (2), or (3) of this subsection;
(ii) against whom a civil monetary penalty has been assessed under section
1320a–7a or
1320a–8 of this title; or
(iii) who has been excluded from participation under a program under subchapter XVIII of this chapter or under a State health care program.
(9) Failure to disclose required information Any entity that did not fully and accurately make any disclosure required by section
1320a–3 of this title, section
1320a–3a of this title, or section
1320a–5 of this title.
(10) Failure to supply requested information on subcontractors and suppliers Any disclosing entity (as defined in section
1320a–3 (a)(2) of this title) that fails to supply (within such period as may be specified by the Secretary in regulations) upon request specifically addressed to the entity by the Secretary or by the State agency administering or supervising the administration of a State health care program
(A) full and complete information as to the ownership of a subcontractor (as defined by the Secretary in regulations) with whom the entity has had, during the previous 12 months, business transactions in an aggregate amount in excess of $25,000, or
(B) full and complete information as to any significant business transactions (as defined by the Secretary in regulations), occurring during the five-year period ending on the date of such request, between the entity and any wholly owned supplier or between the entity and any subcontractor.
(11) Failure to supply payment information
Any individual or entity furnishing items or services for which payment may be made under subchapter XVIII of this chapter or a State health care program that fails to provide such information as the Secretary or the appropriate State agency finds necessary to determine whether such payments are or were due and the amounts thereof, or has refused to permit such examination of its records by or on behalf of the Secretary or that agency as may be necessary to verify such information.
(12) Failure to grant immediate access Any individual or entity that fails to grant immediate access, upon reasonable request (as defined by the Secretary in regulations) to any of the following:
(A) To the Secretary, or to the agency used by the Secretary, for the purpose specified in the first sentence of section
1395aa (a) of this title (relating to compliance with conditions of participation or payment).
(B) To the Secretary or the State agency, to perform the reviews and surveys required under State plans under paragraphs (26), (31), and (33) of section
1396a (a) of this title and under section
1396b (g) of this title.
(C) To the Inspector General of the Department of Health and Human Services, for the purpose of reviewing records, documents, and other data necessary to the performance of the statutory functions of the Inspector General.
(D) To a State medicaid fraud control unit (as defined in section
1396b (q) of this title), for the purpose of conducting activities described in that section.
(13) Failure to take corrective action Any hospital that fails to comply substantially with a corrective action required under section
1395ww (f)(2)(B) of this title.
(14) Default on health education loan or scholarship obligations Any individual who the Secretary determines is in default on repayments of scholarship obligations or loans in connection with health professions education made or secured, in whole or in part, by the Secretary and with respect to whom the Secretary has taken all reasonable steps available to the Secretary to secure repayment of such obligations or loans, except that
(A) the Secretary shall not exclude pursuant to this paragraph a physician who is the sole community physician or sole source of essential specialized services in a community if a State requests that the physician not be excluded, and
(B) the Secretary shall take into account, in determining whether to exclude any other physician pursuant to this paragraph, access of beneficiaries to physician services for which payment may be made under subchapter XVIII or XIX of this chapter.
(15) Individuals controlling a sanctioned entity
(A) Any individual
(i) who has a direct or indirect ownership or control interest in a sanctioned entity and who knows or should know (as defined in section
1320a–7a (i)(6)1 of this title) of the action constituting the basis for the conviction or exclusion described in subparagraph (B); or
(ii) who is an officer or managing employee (as defined in section
1320a–5 (b) of this title) of such an entity.
(B) For purposes of subparagraph (A), the term sanctioned entity means an entity
(i) that has been convicted of any offense described in subsection (a) of this section or in paragraph (1), (2), or (3) of this subsection; or
(ii) that has been excluded from participation under a program under subchapter XVIII of this chapter or under a State health care program.
(c) Notice, effective date, and period of exclusion
(1) An exclusion under this section or under section
1320a–7a of this title shall be effective at such time and upon such reasonable notice to the public and to the individual or entity excluded as may be specified in regulations consistent with paragraph (2).
(2)
(A) Except as provided in subparagraph (B), such an exclusion shall be effective with respect to services furnished to an individual on or after the effective date of the exclusion.
(B) Unless the Secretary determines that the health and safety of individuals receiving services warrants the exclusion taking effect earlier, an exclusion shall not apply to payments made under subchapter XVIII of this chapter or under a State health care program for
(i) inpatient institutional services furnished to an individual who was admitted to such institution before the date of the exclusion, or
(ii) home health services and hospice care furnished to an individual under a plan of care established before the date of the exclusion,
until the passage of 30 days after the effective date of the exclusion.
(3)
(A) The Secretary shall specify, in the notice of exclusion under paragraph (1) and the written notice under section
1320a–7a of this title, the minimum period (or, in the case of an exclusion of an individual under subsection (b)(12) of this section or in the case described in subparagraph (G), the period) of the exclusion.
(B) Subject to subparagraph (G), in the case of an exclusion under subsection (a) of this section, the minimum period of exclusion shall be not less than five years, except that, upon the request of the administrator of a Federal health care program (as defined in section
1320a–7b (f) of this title) who determines that the exclusion would impose a hardship on individuals entitled to benefits under part A of subchapter XVIII of this chapter or enrolled under part B of such subchapter, or both, the Secretary may, after consulting with the Inspector General of the Department of Health and Human Services, waive the exclusion under subsection (a)(1), (a)(3), or (a)(4) of this section with respect to that program in the case of an individual or entity that is the sole community physician or sole source of essential specialized services in a community. The Secretarys decision whether to waive the exclusion shall not be reviewable.
(C) In the case of an exclusion of an individual under subsection (b)(12) of this section, the period of the exclusion shall be equal to the sum of
(i) the length of the period in which the individual failed to grant the immediate access described in that subsection, and
(ii) an additional period, not to exceed 90 days, set by the Secretary.
(D) Subject to subparagraph (G), in the case of an exclusion of an individual or entity under paragraph (1), (2), or (3) of subsection (b) of this section, the period of the exclusion shall be 3 years, unless the Secretary determines in accordance with published regulations that a shorter period is appropriate because of mitigating circumstances or that a longer period is appropriate because of aggravating circumstances.
(E) In the case of an exclusion of an individual or entity under subsection (b)(4) or (b)(5) of this section, the period of the exclusion shall not be less than the period during which the individuals or entitys license to provide health care is revoked, suspended, or surrendered, or the individual or the entity is excluded or suspended from a Federal or State health care program.
(F) In the case of an exclusion of an individual or entity under subsection (b)(6)(B) of this section, the period of the exclusion shall be not less than 1 year.
(G) In the case of an exclusion of an individual under subsection (a) of this section based on a conviction occurring on or after August 5, 1997, if the individual has (before, on, or after August 5, 1997) been convicted
(i) on one previous occasion of one or more offenses for which an exclusion may be effected under such subsection, the period of the exclusion shall be not less than 10 years, or
(ii) on 2 or more previous occasions of one or more offenses for which an exclusion may be effected under such subsection, the period of the exclusion shall be permanent.
(f) Notice, hearing, and judicial review
(1) Subject to paragraph (2), any individual or entity that is excluded (or directed to be excluded) from participation under this section is entitled to reasonable notice and opportunity for a hearing thereon by the Secretary to the same extent as is provided in section
405 (b) of this title, and to judicial review of the Secretarys final decision after such hearing as is provided in section
405 (g) of this title, except that, in so applying such sections and section
405 (l) of this title, any reference therein to the Commissioner of Social Security or the Social Security Administration shall be considered a reference to the Secretary or the Department of Health and Human Services, respectively.
(2) Unless the Secretary determines that the health or safety of individuals receiving services warrants the exclusion taking effect earlier, any individual or entity that is the subject of an adverse determination under subsection (b)(7) of this section shall be entitled to a hearing by an administrative law judge (as provided under section
405 (b) of this title) on the determination under subsection (b)(7) of this section before any exclusion based upon the determination takes effect.
(3) The provisions of section
405 (h) of this title shall apply with respect to this section and sections
1320a–7a,
1320a–8, and
1320c–5 of this title to the same extent as it is applicable with respect to subchapter II of this chapter, except that, in so applying such section and section
405 (l) of this title, any reference therein to the Commissioner of Social Security shall be considered a reference to the Secretary.
(h) “State health care program” defined For purposes of this section and sections
1320a–7a and
1320a–7b of this title, the term State health care program means
(1) a State plan approved under subchapter XIX of this chapter,
(2) any program receiving funds under subchapter V of this chapter or from an allotment to a State under such subchapter,
(3) any program receiving funds under subchapter XX of this chapter or from an allotment to a State under such subchapter, or
(4) a State child health plan approved under subchapter XXI of this chapter.
(i) “Convicted” defined For purposes of subsections (a) and (b) of this section, an individual or entity is considered to have been convicted of a criminal offense
(1) when a judgment of conviction has been entered against the individual or entity by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged;
(2) when there has been a finding of guilt against the individual or entity by a Federal, State, or local court;
(3) when a plea of guilty or nolo contendere by the individual or entity has been accepted by a Federal, State, or local court; or
(4) when the individual or entity has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld.
(j) Definition of immediate family member and member of household For purposes of subsection (b)(8)(A)(iii) of this section:
(1) The term immediate family member means, with respect to a person
(A) the husband or wife of the person;
(B) the natural or adoptive parent, child, or sibling of the person;
(C) the stepparent, stepchild, stepbrother, or stepsister of the person;
(D) the father-, mother-, daughter-, son-, brother-, or sister-in-law of the person;
(E) the grandparent or grandchild of the person; and
(F) the spouse of a grandparent or grandchild of the person.
(2) The term member of the household means, with respect to any person, any individual sharing a common abode as part of a single family unit with the person, including domestic employees and others who live together as a family unit, but not including a roomer or boarder.
